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FTX balance sheet, revealed

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Re: FTX balance sheet, revealed

#191

Post by kibwen »

imtringued wrote: post #153
bjornsing wrote: post #92

Earlier quoted context omitted.

But maybe it could have been? I’m a complete crypto skeptic who would never touch anything like FTT, but it’s not an obvious Ponzi scheme. I think one of the troubles with crypto is that it’s very easy to operate what is effective a Ponzi scheme, without fully realizing it yourself.

If it has no way to wind down to zero it is a Ponzi scheme. Yes the USD and other fiat currencies are partially ponzi schemes as well but only the store of value part.

This is diluting the definition of "ponzi scheme" to the point of uselessness. State-backed central currencies emerged because people in informal economies were bartering to exchange goods and services, which is less efficient than having a standardized medium of exchange, so central authorities issued currency in order to increase the efficiency of the economy. That's not a ponzi scheme, because the value of the currency doesn't rely on some greater fool buying the currency from you.

Yes, you can use these currencies as a store of value, and therefore get utility from exchanging them with somebody in the future, but that's not where the value of the currency itself derives from (which is 1. the utility of the currency itself (people want to transact in it in personal affairs, because it's more efficient and reliable than the alternative), and 2. the authority of the state (people must transact in it in state affairs)). Call it what you will, but it's not a ponzi scheme. If you're looking for things in traditional fintech that resemble a ponzi scheme, look at something like a non-voting stock without a dividend.

Re: FTX balance sheet, revealed

#192

Post by jasonwatkinspdx »

ilrwbwrkhv wrote: post #171
mayankkaizen wrote: post #150

Earlier quoted context omitted.

This is the most important thing I was wondering about. If crypto businesses are shady and Ponzi schemes and these crypto guys are working mostly behind the scene, why would a VC like Sequoia invest in such firms? I somehow feel firms like Sequoia gave these crypto stuff some credibility and positive exposure. It was like, "don't worry, their business is legit and booming.'

Some kaching on the side. ;) Seriously though, a lot of influencers promoting this stuff have been getting paid in cold hard US dollars to promote these scams. How do I know? I spoke to influencers to talk about my portfolio companies and many of them told me the crazy amount of cash they were getting paid from these scammers. Think 25,000 for a channel with hardly 100k followers. That's why I feel like Sequoia partn…

That's nothing compared to what stake and the other bitcoin casinos have been spending on influencers. Until twitch banned them their top sponsored streamers were making a reported 2 to 3 million a month.

Likewise there's tons of crypto money sloshing around the esports world. FTX paid TSM 200 million for naming rights.

In an environment like this its really hard for legit sponsors to pitch influences unless the influencer is personally interested or ethically refuses to work with the crypto sponsor whales.

Re: FTX balance sheet, revealed

#193

Post by smileysteve »

djbebs wrote: post #112
mudrockbestgirl wrote: post #34

Okay, but... how? How did they manage to lose so much money by running a popular exchange that should bring in tons of fees? Even if they were gambling with part of the deposits, how can they lose 90% of all assets? You'd have to be actively trying to lose money to be this bad... Also, where does Alameda fit into the picture?

They stole clients assets and used them to: 1- Gamble with them 2- pay themselves 3- lobby the government 4- bailout other failing crypto companies. Everything here could have been done with any non-crypto exchange.

Kind of sounds like Chase / Washington mutual when you put it like that

Re: FTX balance sheet, revealed

#194

Post by pooper »

codetrotter wrote: post #178
greiskul wrote: post #161

Earlier quoted context omitted.

Exactly. People that say that the value of fiat money is fake, never think about taxes. You want to own a house? The government mandates that you acquire and give them a certain amount of US dollars. Even if you did every single transaction in your life with other assets, paying for stuff with gold and chickens, at the end of the day, the tax man will come for you, and the tax man only takes dollars.

I want to pay my taxes in BTC or ETH. I remain hopeful that one day I will be able to. Until then, fiat taxes it is.

I lost faith in cryptocurrency pretty early on because of the idea that it costs money to send or receive money. My ideal of a currency is it should be free of cost or almost free of cost to send or receive money.

There was another post here about a thought experiment where someone asked if I had eight billion dollars, how can I send a dollar to every person on earth? Well, right now you can't because it costs too much to send or receive money.

I don't have a solution but the fact that eth is full of "gas" people who want USD, makes me think it is no different from the Bitcoin crowd regardless of the pos switch. Or to quote the wolf of wall street, the people who own Bitcoin and Ethereum networks still take home cold hard cash. Don't fall for their BS. Bitcoin or eth doesn't pay for your mining rigs or your electricity.

Re: FTX balance sheet, revealed

#195

Post by recuter »

SilverBirch wrote: post #184

Using the word "Liquid" in the context of these accounts is... I don't know? Fraudulent? I understand that in the context of real finances things might be illiquid - it might take time to sell your house, or if you're a particularly big holder of stock in a company you founded you might have liquidity problems divesting over time. But it's really just taking the piss describing a lot of this stuff as "illiquid". FTT…

When the people who print the real currency are your friends, the people who are supposed to regulate who can print currency are your friends, and the people who lend you massive amounts of real currency are your friends - it is easy to delude yourself into believing that on a long enough time scale some of the plebs will buy your funny money and you will become more liquid and everything will sort of work out somehow.

Money creates more money, so if can can create money that creates more money, we're broadening the economy, expanding it all the time.. (https://www.youtube.com/watch?v=M_3T-Af57Pg)

Sort of similar to how Trump said his own net worth fluctuates day to day sometimes based on his feelings since it is tied to perceptions of the Trump name as a brand.

Or how George Costanza said it's not a lie if you believe it.

Or how a gambler who is down is sure he can make it back.

In other words, yeah, as fraudulent as can be. Lets see if anybody actually goes to jail.

Re: FTX balance sheet, revealed

#196

Post by jasonwatkinspdx »

ilrwbwrkhv wrote: post #164
blue_light_man wrote: post #36

The only lesson I learend from this whole debacle is never trust people and organisations you know from the Internet no matter how famous or humble or good they are. Trust the tech. But never the people. Especially for financial advices. Be it Sequoia. Or Yc. PG, Chamath, Mark Cuban ,Balaji or the Collision brothers. Tom Brady or SBF or CZ. Never fucking trust people or organisations. They are all here for their fina…

If there comes a day pg makes his twitter handle pg.eth or whatever nonsense a bunch of these guys were doing, I would lose all respect for him. But without that what PG and YC have provided is incredible value. Real world tangible value. Do you remember what snakes VCs used to be before YC came to the scene? Now my only fear is that Garry Tan on the other hand is indeed deep inside these scams whether knowingly or u…

If you think YC somehow provides protection against rat duck games by VCs I have some very bad news to share with you.

Re: FTX balance sheet, revealed

#197

Post by williamcotton »

mkagenius wrote: post #159
Melting_Harps wrote: post #154

Earlier quoted context omitted.

> I’m a complete crypto skeptic who would never touch anything like FTT, but it’s not an obvious Ponzi scheme. I think one of the troubles with crypto is that it’s very easy to operate what is effective a Ponzi scheme, without fully realizing it yourself. I'm pretty certain most of us, at least in the BTC community, were mocking this yield farming as the new ICO since it's inception. The Effective Alturism, and his p…

> this was the typical disruptor cosplaying grifting Being connected and well off, should now be a sign of lack of inventive mind than having one. VCs think they are risk takers but rather go for well connected SV folks unconsciously or consciously to avoid risks. I hope these two three episodes like Theranos put some sense in them.

> Being connected and well off, should now be a sign of lack of inventive mind than having one.

Or how about it is neutral?

Re: FTX balance sheet, revealed

#198

Post by DebtDeflation »

Shank wrote: post #17

The "before this week" column seems to be attempting to draw sympathy by saying "but everything was fine before, seriously!" when in reality it just proved that, even in the best of worlds, they had an extremely optimistic view of the entire crypto ecosystem, including its liquidity. I can't believe they seriously held that much of their total value in their own issued token. That's just preposterous. Imagine if JP M…

>It's like recursive valuation.

Exactly correct. Most of these crypto companies hold assets that are nothing but tokens they or an affiliated entity print on demand. Just like how most of Tether's assets are commercial paper yet they refuse to name whose commercial paper and no one who makes a market in that space has ever dealt with them - it's obvious the commercial paper was issued by other crypto companies and likely secured only by crypto. And how exactly do people think all of those staking/farming operations are generating those ridiculous levels of "yield"?

Re: FTX balance sheet, revealed

#199

Post by kayamon »

331c8c71 wrote: post #139
djbebs wrote: post #112

Earlier quoted context omitted.

They stole clients assets and used them to: 1- Gamble with them 2- pay themselves 3- lobby the government 4- bailout other failing crypto companies. Everything here could have been done with any non-crypto exchange.

How would a regulated exchange gamble with clients money? It's even technically impossible for all they do is managing a place where participants trade.

Most banks loan their customer assets out. You money isn't sitting in a big Scrooge-McDuck money pit at Citibank -- it gets loaned back out to other people.

Re: FTX balance sheet, revealed

#200

Post by bernawil »

FollowingTheDao wrote: post #175
bjornsing wrote: post #92

Earlier quoted context omitted.

But maybe it could have been? I’m a complete crypto skeptic who would never touch anything like FTT, but it’s not an obvious Ponzi scheme. I think one of the troubles with crypto is that it’s very easy to operate what is effective a Ponzi scheme, without fully realizing it yourself.

Ponzi schemes are not obvious, until they’re totally obvious. That’s why they keep happening. A lot of people will explain to others that it’s a Ponzi scheme, but those people are making so much money that hey don’t want to hear it. Crypto is a Ponzi scheme, and it always was. I’m not just talking about these companies, being Ponzi schemes, I’m talking about the whole ecosystem being a Ponzi scheme. You can either li…

At this point everybody is pretty competent at identifying pyramid schemes. Now people enter them willingly hoping to cash out on time, no different than gambling. The scam now is making people believe they are higher in the pyramid than they really are.
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